Latin Online Ad-Networks: What You Need to Know

Online Ad Networks are certainly fashionable these days in the Hispanic online advertising space. Every advertiser and media executive has to deal with them. They can reduce the complexity and add reach to the media buy. “Online networks are a reality,” says Michelle Azan, advertising director at Terra Networks. “With over 200 ad networks in the general market and several springing up in the Hispanic market, publishers are using these networks to aggregate more users/impressions and offer more unique eyeballs to marketers. And marketers are enjoying the lower CPMs and increased efficiencies.”

“We do use online ad networks for some of our buys,” says Marla Skiko, VP Media Director at Tapestry in Chicago, a multicultural ad agency that buys media for clients that include Kraft, Disney, Allstate, Coca Cola and P&G. Skiko adds, “In the ideal scenario, the advantage of ad networks is they add reach to your buy across relevant content at efficient pricing. Often the extra benefit they can provide is targeting technology to more precisely home in on the audience your brand wants to reach. Especially on clients seeking to connect with "in market" consumers, behavioral targeting or re-targeting capabilities are some of the factors that would make a network more attractive.”

Skiko cautions that, “In general, ad networks offer less control over where your ad will run. As a result, advertisers are increasingly pushing for the transparency they want and control over particular content areas to ensure their message winds up in the right environment and connects with the right user.”

Many of the larger networks regard themselves as both vertical and horizontal online ad networks. This is the case of Punto Fox, the largest Latin American online Advertising Sales Network (according to Comscore Media data Punto Fox-Media Partners had 51.2 mil unique visitors during the month of Feb'08 and it reached 86.4% of the Total Internet Audience. Punto Fox is the result of the merger of Argentina’s Directa Networks (and its associated companies) with Guatemala’s ClickDiario which were subsequently bought by News Corp’s Fox. “We definitely are both, a Vertical and remnant ad Network,” says Hector Costa, senior vp, managing director of Punto Fox.

“We strongly feel that a successful vertical network is not just a rep firm, nor a blind ad network with low-quality ads. If you look ad the latest news and reports in different media outlets, in recent months over 30 new vertical networks have launched, and many more for sure will follow this model of business,” says Costa. “A successful vertical network will beat old destination sites and portals in categories, choices and size of the audience. It will not only be able to reach the most unique users per month, but also provide their clients with quality audience and the best ROI.”

In April, Fox purchased the online video ad network uTarget underscoring the rise of online video advertising. Punto Fox will now be able to install online video technology (including 15-second clickable pre-rolls, contextual videos and persistent in-page videos as well as video pop-unders and interstitials) in its publisher network in the U.S. Hispanic Market and Latin America.

Not all Hispanic online ad networks are present in Latin America. Hola Networks, represented by Rafael Monteiro and Margot Bradley is devoted solely to the U.S. Hispanic market. “US Hispanic and Latin America are two very distinct markets with very different cultures.  Most clients have separate departments and budgets for each,” says Bradley.

Alicia Morga, CEO and publisher of Consorte Media does not want to be called a vertical or remnant ad network, but a digital marketing company “that offers integrated marketing solutions for reaching the Hispanic market. Our offerings include publisher representation services, a premium publisher network with hundreds of high-quality sites, and hosted lead generation services.”

In fact, it is true that the term “ad network” has a negative connotation in the industry.  “An ad network implies blind buys of leftover ad impressions that would otherwise become value-added for someone else,” says AdMixture’s Danny Allen. “Admixture is more of a website representation company – we represent the top tier ad impressions of our ‘mid-tail’ website partners in the Hispanic market. We run very little, if any, remnant inventory, so to that extent, I guess you could say we’re vertical.”

Consorte Media’s Alicia Morga agrees: Reaching the right audience really starts with the quality of the inventory.  Ad networks have historically been about remnant inventory, and because Hispanic/Lat Am publishers are like any other type of publisher, they too have some remnant inventory.” 

But as the market is discovering, remnant inventory can deliver underwhelming results.  “We've found that being focused on premium placement inventory and overall publisher quality allows us to help advertisers reach the right audience,” says Morga. “And while you will find advertisers interested in Hispanic/LatAm remnant space as a way to test the market, the large savvy brands are focused on quality.” 

Yet, remnant online ad networks do play a role for large portals that have their own sales force. Terra’s Michelle Azan notes that, “Terra partners with some remnant networks to monetize our unsold inventory, but not to represent our premium inventory. In recognition of the need for this extended reach, Terra created our own vertical network in the summer of 2007, called ‘Terra Plus.’ Our advertisers can now buy our rich, premium inventory in Terra and, in addition, they can buy our partner sites.”  The advantage for the remnant networks is that they have the benefit of hard-to-find Hispanic inventory for CPL/CPA type campaigns.

Admixture also represents African-American and Asian websites. According to Allen, “The African-American market is in some ways similar, and in some ways different than the Hispanic market. The big difference between the African-American market and the Hispanic market, of course, is language.” 

Interestingly, Allen points out that the African-American market is at a point today where the Hispanic market will be in the near future. That is to say, African-American agencies and websites can’t hide behind the language barrier, and instead have to rely on cultural insights and experience, and knowing the consumers in their market better and more deeply than their general market competitors.”

Ad Networks: Pros and Cons

The Good

The Not-so-Good

Add Reach

Less control

Efficient pricing

Dispersion across sites/content

Targeting Technologies (Tech savvy)

Lack of transparency as to where ads are running

Monetize Remnant Inventory (the long tail)

 

 

Geotargeting, a major source of business

Some networks represent a defined group of digital media properties. This is the case of Publicitas: “Our exclusive representation of the Grupo de Diarios America, Editorial Abril and other leading publications, allow us to offer our advertisers a wealthy and educated audience in both the Latin American, U.S. Hispanic and Caribbean marketplaces. Since we are a representation firm and not a brokerage house, we are able to offer integrated marketing solutions that achieve our advertisers’ objectives,” says Paul Meyer, vp digital media at Publicitas. “The secret is out about how effective geo-targeting is with U.S. Hispanics reading Latin American newspaper Web sites. When I worked on the publisher side my clients were always frustrated with the limited selection of web sites and ad inventory,” recalls Meyer. “The problem was that they were not looking outside the finite world of the four U.S. Hispanic portals. In the digital world there are no barriers for the US Hispanic, who wants to consume his home-country’s local news, sports and entertainment content.”

According to Meyer, the geo-targeted U.S. Hispanic online advertising market will grow around 30%-40% in 2008. “The pioneering industries in the Latin American IP market, like travel and telecommunications, continue to expand their budgets. They have done the math on their past campaigns and the IPs have it. For example, if an airline wants to sell a ticket to someone in the US traveling to Mexico, there is no better way then to IP a US user visiting the El Universal newspaper site in Mexico. Also, with the strong entrance of sectors such as automotive, this will be another banner year for newspaper sites,” Meyer concludes.

Selling Blog Space

“Blogs are a hugely important part of the growth of the Hispanic market online,” says Consorte’s Alicia Morga.  “More blogs mean more voices, and these voices come from one thing - more Hispanics moving online.  Blogs are the diamonds in the long tail of the media space, and we will start to see them become more valued by advertisers over time, as the general market has seen.”  

However, Publicitas’ Paul Meyer, of, thinks that blogs are not yet ready for online advertising:  “The current monetary potential  for a network is very limited , as few advertisers see the true value in blog advertising. Blog advertising will stay a niche market for a few years, but in time it will have a very big impact.”

  

 

Type of Online Advertising Network

Presence in Latin American Market

Off-Line Offerings

Comment

AdMixture

Website  representation company

Yes

No

Represent the top tier ad impressions of our “mid-tail” website

Antevenio

Horizontal and Vertical Ad Network

Yes

No

Former I-Network based in Spain

Centro

Represents Local Media (Radio, TV, Newspapers)

Yes

Yes

Specialized in Local media worldwide

Consorte

Horizontal and Vertical Ad Network

Yes

Yes

-Several offerings (special Blog offerings)
-Premium Publisher Network
- Lead Generation Service

Hispano Click

Horizontal and Vertical Ad Network

Yes

No

Bought by Batanga in early 2008

Hispanic Digital Network

Publishers Representative Network

No

No

Mostly represents Hispanic Newspaper Website

Hola Networks

 

No

No

Emphasis on Behavioral Targeting

HipCricket

Mobile-Ad Network

No

No

Mobile Marketing Communications Firm

Gorilla Nation

Horizontal and Vertical Ad Network

No

No

Present in other Ethnic Markets

Publicitas

Publishers Representative Network

Yes

Yes

Represents Major Latin American newspapers

Punto Fox

Horizontal and Vertical Ad Network

Yes

Yes

Strong cross-platform orientation, particularly with Cable TV

Related Article:

Is there a need for a U.S. Hispanic – Latin American Online Ad-Exchange? (April, ’08) 

Market Intelligence: Valuation of Hispanic Media Companies, What you Need to Know (May, ’08)


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